Where mortgage rates are headed over the next 12 months.

The 30-year fixed mortgage rate sat at 6.58% in late July 2026 — close enough to where it's spent most of the year that "waiting for rates to drop" has stopped being a viable strategy for most buyers and investors. The more useful question isn't when rates fall, but by how much, and over what timeline.

The next 12 months: more of the same, then a slow ease

The Mortgage Bankers Association's baseline forecast has the 30-year fixed averaging 6.5% across 2026, 2027, and into 2028 — essentially flat. Fannie Mae's forecast is close behind, projecting rates averaging around 6.4% for the remainder of 2026. Both forecasts describe a market that has settled into a new normal rather than one poised for a sharp move in either direction over the coming year.

Further out, forecasters agree on direction — not much on speed

Looking past the 12-month window, the picture gets more optimistic: major forecasters expect rates averaging around 6.3% in the second half of 2027, with some seeing a path down to the 5.30%–5.55% range by mid-2027 if inflation cooperates. The spread between the most conservative and most optimistic forecasts is wide enough that it's worth treating any single number as a scenario, not a prediction.

What actually moves this number

Three things will determine which end of that range plays out: the path of Fed policy, whether inflation keeps running above the Fed's 2% target, and overall economic performance. An unexpected downturn could pull rates down faster than any forecast currently models; persistent inflation could keep them elevated well past 2027.

Federal Reserve Chair Jerome Powell has been notably direct about a related point that matters more than the rate itself: even when rates ease, it may not unlock the housing market the way many expect, because so many owners are sitting on pandemic-era rates far below anything available today and have little incentive to sell. The deeper issue, in his framing, predates this rate cycle entirely.

That's the piece worth sitting with: NAR Chief Economist Lawrence Yun has separately projected mortgage rates averaging near 6.5% alongside a meaningful rebound in home sales heading into next year — meaning the housing market may loosen up somewhat even without rates moving much, simply because sellers adjust to the new normal and supply catches up. For MANAV, that's the underwriting assumption we're running on: plan financing around today's rate environment, not a rate cut that may not come, and let renovation and repositioning — not rate timing — be where the returns get made.